New Delhi: India's largest car maker Maruti Suzuki India is looking to regain lost ground in the small car segment with the launch of a completely new version of its erstwhile best selling model Alto on October 16.

As per media reports, new Maruti Alto 800 is likely to be priced at around 2.5-3 lakh, allowing it to compete with the Tata Nano and the Hyundai EON.

The company will launch an all-new Alto 800 to replace the existing Alto as the company seeks to overcome tough market conditions, especially high petrol price and interest rates that have hurt the sales of small cars. It is also offering CNG option in the new Alto 800.

"We want to do what we were doing and even better with the Alto 800 coming in," Maruti Suzuki India (MSI) Vice President Market Manohar Bhat said.

Sales of the Alto have declined 34.83 percent in the April-August period to 89,000 units as compared to 1.22 lakh units in the year-ago period. The model has been MSI's best selling model for many years until Swift overtook it earlier this year.

Last year, the company had sold 3.08 lakh units of Alto and the year before it stood at 3.4 lakh units.

Hit by the declining sales of its smaller cars, specially Alto, MSI's share had gone down below 40 percent in the Indian passenger vehicles market which stood at 10,49,961 units in the April-August period this fiscal.

"It is a very difficult market now. It is in a bit of flux now and with the Alto 800, we hope there would be excitement and it will reignite the market," Bhat said.

Launched in 2001, the Alto sold a total of 20 lakh units in the domestic market and exported another 2.47 lakh units.

MSI and its vendors have spent Rs 470 crore in developing the new Alto 800, which is based on the platform of the previous model.

The company is banking on Alto 800's improved fuel efficiency of 22.74 kmpl, which is 15 percent higher than the previous model, to be one of the key factors to create customer pull apart from its new design and other features such improved gear shift and more leg room for rear passengers.